Learning Insights

In Malcolm Tatum's view, this occurs when the prices of similar goods or services in
different locations or over time exhibit similar patterns of change. The term
"integrated markets" refers to a situation in which prices on different markets have a
clear relationship with one another. Prices for related goods and services are
integrated into a single market when this is done. Increasing financial services and
investment options competition is one of the many social advantages. Secondly, it
helps smooth domestic economic and financial cycles, and alarm allows for greater
risk diversification, which contributes to better risk management and financial
stability. High and low integration refer to the ease with which two or more markets
can trade with one another. When prices are similar across markets with low trade
barriers, high levels of integration are achieved. As a result, prices are influenced by
the lack of integration and high trade barriers in this situation. Because it lowers trade
barriers and increases market fluidity, international trade aids market integration.

Market integration can be broken down into three distinct categories. The process
of horizontal integration occurs when a company takes over the management of other
companies that perform similar market functions at the same level in the market
hierarchy as themselves. With vertical integration, an organization performs more
than one function in the marketing cycle. It also occurs when a corporate group,
which includes two or more business entities engaged in completely different, but
related or similar businesses, usually with a parent company and numerous
subsidiaries.

As we move forward, let's talk about the different forms integration can take place.
By reducing tariffs on certain imports, member states of an economic bloc can
establish preferential trade agreements. Whenever two or more countries in a region
agree to lower trade barriers for all goods imported from other members, a free trade
area is created by that agreement. In a customs union, tariffs between members are
abolished and a single external tariff is accepted against non-member countries.
Creating a single market for all economic resources eliminates all trade restrictions on
the free flow of goods, services, capital, and labor across national borders. Even
though its members are free to pursue their own macroeconomic policies, the
Economic Union trading bloc has an open market where its members can trade with
each other and with non-members.